It is April 4th, 2018, and I am sitting in my office in Gahanna. The cool air, grey clouds, and slow drizzling rain seem to reflect the current mood of the market. The weather in Ohio–just like the stock market–will soon change. We all know that.
I wish that every investor would consider the following:
- The fairly steady upward trajectory of the market the past few years was not typical. The environment we are experiencing today is more like a normal market. We are in a period of peaks and valleys.
- Please do not focus on just one index (like the Dow Jones Industrial Average which is an index comprised of only 30 companies) or on one small period of time–like 24 hours or one week. Investors need to focus on the past 24 years and then look forward to the next 10 to 15 years.
- If an investor’s goals have not changed, then an investor’s behavior should not change simply because markets overreact to economic and geo-political events.
- Believing that all indicators of volatility are negative is dangerous. Do not let fear of short-term market movements undermine your prudent investment strategies.
- Turn off the TV if you can. Review your investment plan if you are still concerned. Having a prudent plan in place and reviewing it regularly will help you navigate through periods of uncertainty. It will also help you not t respond out of fear.
In the few minutes I have been writing this blog, the drizzling rain has stopped. Although the sun is not yet shining, the weather is changing, and I know better weather will soon arrive.